In Baghdad, lap of luxury isn't all that comfortable

BAGHDAD, Iraq - The war in Iraq pushed the Israeli-Palestinian conflict into the background, but it has made a media star of the Palestine Hotel.

Overlooking the Tigris River, the 16-story hotel is home to hundreds of foreign journalists, including many who stayed here during the war. (Two were killed when American forces fired at the 15-floor in a controversial incident.)

During the day, the Palestine's lobby is jammed with reporters, photographers, soldiers, translators, drivers, job seekers and various hangers-on. Pinned to a bulletin board are notes like these:

"If you need a translator or fix-man, I can do it for you! My name is Haider, I'm M.I.C. in chemical engineering."

The hotel was built in the mid '80s as Le Meridien Palestine, one in a chain of five-star hotels popular throughout the Middle East. But it lost its franchise after the 1991 Persian Gulf War and became just the Palestine. Now it is co-owned by the Iraqi government and Iraqi shareholders.

Stuck in a time warp like almost everything else here, the Palestine is a throwback to the '80s with a decor that's heavy on brown and orange. It still has an office for Iraqi Airways, which stopped flying 12 years ago when the Gulf War began and Iraq sent most of its planes to Jordan and Iran for safekeeping. (They're still there.)

The restaurant is dark and divided into numerous compartments reminiscent of an old European train car. The menu is limited - the breakfast buffet consists of hard-boiled eggs or omelets with the consistency of foam rubber; tomatoes; and shriveled black olives. Tea is available in the morning but not for lunch, and there is never any milk or cream.

But a veritable bazaar has developed just outside the hotel where it's possible to buy everything from rugs to watches to White Horse Whiskey ($20 a bottle). If you don't like the hotel omelets, you can get one from a man who cooks on a little gas grill in the parking lot.

Communications are a constant problem. The Palestine's phone system can't handle international calls, there's no Internet and the TVs only get snow. To find out what's going on in the rest of the world - or even the rest of Iraq - journalists call their home offices on satellite phones or head for CNN's temporary studio, just off the lobby.

The main hotel here used to be the Al Rasheed, with its infamous mosaic portrait of the first President Bush at the entrance. But after the Americans entered Baghdad early this month, soldiers took a sledgehammer to the portrait and looters carted off much of the furniture.

The Palestine is well protected by U.S. soldiers, but you can often hear gunshots nearby and mysterious muffled booms farther away. Compared to many Iraqis, though, guests have it good: There's running water, the elevators work and the electricity is on - most of the time.

A lot of Iraqis haven't been paid in weeks, but Mohamed Abd Zaer says he's owed a whopping 150-million dinars - about $600,000.

For what? Making missiles for Saddam Hussein, Zaer says.

An engineer, Zaer used to work in the government's Al-Samoud missile program. For the past two years, he has had his own factory where he made the metal casings and warheads for the Fatah missile.

U.N. weapons inspectors destroyed many of the Al-Samouds, which could travel a greater distance than allowed under an agreement signed after the 1991 Gulf War. But Zaer said Hans Blix, head of inspections, visited his plant and verified that the Fatahs were within the permissible 150-kilometer range.

At least some of the Fatahs, Zaer speculates, were among those launched at Kuwait during the first few days of the current war. No serious injuries were reported, but a shopping center was badly damaged.

Zaer insists that United States won't find any weapons of mass destruction - that was just an excuse to attack, he says.

"We have no chemical or biological weapons but we have the know-how to do it."

So what's Zaer up to these days? His factory escaped the bombing, but hasn't yet reopened. When it does he will start producing something much more benign: icemaking equipment.